Americas News
U.S. Makes $210 million Investment in Biofuel Refineries
U.S. Energy companies Emerald Biofuels LLC, Fulcrum BioEnergy Inc. and Red Rock Biofuels LLC have been awarded $210 million by the U.S. Department of Defense to build refineries that produce biofuels for the military, Biofuels Digest reports.
The funds were given under the Defense Production Act to create fuel that will, by weighted average, cost the U.S. government less than $3.50 per gallon, a price point said to be cost-competitive with petroleum-based fuels.
"We’re very happy with market prices. If they are $3.45, great. But if market prices work out to be $3.00, we can remain cost-competitive," said Jim Macias, CEO of Fulcrum BioEnergy.
The refineries are expected to be ready in 2016, and will have the capacity to produce 100 million gallons of military-spec jet fuel and marine diesel, which are typically less volatile with higher flashpoints than normal fuels.
Chris Tindal, the U.S. Navy's director of operational energy, said that he is still uncertain what the fuel blending percentages will be aboard the ships in the Great Green Fleet, the Navy's attempt to prove the viability of bio-fuels.
"Whether we are using 10 percent at the low end or 50 percent at the high end will depend on the ship’s operations. For example, we may be taking on fuel from a station where there is a 10 percent blend, and then refueling at a station with a 50 percent blend. And each ship, of course, is starting from 100% petroleum today," he said.
The Defense Production Act was implemented during the Truman administration to invest in military material production.
Secretary of the Navy Ray Mabus said that in the future, more funds are expected to be made available for a possible fourth grant for another refinery.
A Navigant Research report from earlier this year predicted that biofuels will form 6.1 percent of the U.S. marine fuels and aviation market by 2024.
